Expansion of Health Savings Accounts an Important Health-Care Reform

Taxpayers and those more broadly interested in reversing the slow road to socialized medicine were disappointed last week to learn that the Senate Finance Committee dropped health savings account (HSA) expansions from their “One Big Beautiful” tax bill. It’s imperative that these HSA provisions, which were passed as part of the U.S. House’s version of the tax bill, be restored to the Senate version. They represent the biggest HSA reform and expansion in a generation.

For the uninitiated, an HSA is a triple tax-advantaged savings account: Contributions are tax-deductible to you or to your employer; money in the account can be invested, and grows tax-free; and distributions are tax-free if used for health care. HSAs come with a catch: While distributions can be used on almost any out-of-pocket medical expense, contributions are only permitted in years in which the owner is enrolled in an HSA-qualified health insurance plan (more on that later), and there is a dollar limit on annual contributions (in 2025, $4,300 for individuals, $8,550 for families, plus a $1,000 “catch up” booster for an individual aged 55 and older).

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Ryan Ellis

Ryan Ellis is the president of the Center for a Free Economy and an IRS-enrolled agent.

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Taxpayers and those more broadly interested in reversing the slow road to socialized medicine were disappointed last week to learn that the Senate Finance Committee dropped health savings account (HSA) expansions from their “One Big Beautiful” tax bill. It’s imperative that these HSA provisions, which were passed as part of the U.S. House’s version of the tax bill, be restored to the Senate version. They represent the biggest HSA reform and expansion in a generation.

For the uninitiated, an HSA is a triple tax-advantaged savings account: Contributions are tax-deductible to you or to your employer; money in the account can be invested, and grows tax-free; and distributions are tax-free if used for health care. HSAs come with a catch: While distributions can be used on almost any out-of-pocket medical expense, contributions are only permitted in years in which the owner is enrolled in an HSA-qualified health insurance plan (more on that later), and there is a dollar limit on annual contributions (in 2025, $4,300 for individuals, $8,550 for families, plus a $1,000 “catch up” booster for an individual aged 55 and older).